What a Pet-Friendly Rental Property Can Do For Your ROI
Osprey Property Management | October 2023
In a competitive rental property market like Norfolk, VA, finding ways for your rental properties to stand out is essential. Additionally, when your properties attract more quality tenants, you'll also see a boost in your return on investment (ROI).
One route that many rental management companies recommend is allowing pets in rental properties. Our Osprey Property Management experts have seen the many bottom-line benefits of pet-friendly properties. Still, we realize many rental properties have reservations about allowing animals in their rental units.
In this blog, we share insights into how you can increase your ROI by allowing pets and keeping tenants longer — and how to protect your properties with animals in the house.
What Are the Benefits of Pets in Rental Properties?
When considering the potential of property damage from animals vs. better returns for your rental properties, understanding the benefits of offering a pet-friendly rental property can help. Here are a few.
Widen Your Tenant Pool by Allowing Pets
The most immediate advantage of transforming your property into a pet-friendly rental space is the dramatic expansion of your prospective tenant pool.
A significant number of people are pet owners (including renters), so when your property prohibits pets, you're essentially barring a large segment of potential renters. Pet-friendly properties experience higher demand and rent out much quicker than their non-pet-friendly counterparts. This high demand translates into fewer vacant days, meaning you spend less time and money on advertising and marketing.
Over time, this influx of applicants allows you greater flexibility in tenant selection. You won't have to settle for less-than-ideal renters because of a limited applicant pool. Instead, you can afford to be more selective, opting for tenants with solid references and good rental histories, ultimately resulting in a more stable and profitable leasing experience.
You also gain the added benefit of tenants generally being more committed to long-term leases, mainly because finding a property that allows pets is challenging for pet owners. So, they are more likely to renew their leases, contributing to lower turnover rates and consistent rental income for property owners.
The net effect of these benefits is a potent increase in your rental property's ROI, a goal every property owner strives to achieve. By simply opening your doors to responsible pet owners, you position your property as a more attractive option, which is an excellent long-term strategy for financial success.
Increase Monthly Rent and Maximize ROI
Allowing a pet-friendly property to rent widens your potential tenant pool and provides an opportunity to charge higher rent, giving your monthly income an immediate boost.
Pet owners are often prepared to pay a premium for the privilege of a pet-friendly environment, recognizing that such accommodations are relatively scarce. This willingness to pay more can significantly contribute to maximizing your returns.
However, it's important to strike a balance when setting the pet fee or additional rent. Overcharging can deter even the most eager pet owners, while undercharging might not sufficiently cover potential wear and tear. Therefore, keeping the pet fee reasonable is key.
As an experienced property management company, we recommend conducting market research or consulting with one of our property managers to gauge what's considered an acceptable range for pet fees in the Norfolk area.
Reduce Turnover and Associated Costs
High tenant turnover is undoubtedly one of the most significant challenges property owners face, severely impacting ROIs.
Every time a tenant leaves, there are immediate financial implications. You need to invest in marketing campaigns, possibly engage property management companies for their services, and spend valuable time and resources conducting property viewings.
On top of that, there are costs associated with cleaning, repairing, and preparing the space for the next tenant. These expenses can add up quickly, eating into your profits.
However, allowing pets can be a game-changer in this scenario. Pet owners are generally excellent renters who often opt for longer lease terms.
The challenge of finding a new pet-friendly property to rent acts as a strong incentive for them to renew their leases. Once they find a property that accommodates their furry friends, they're more likely to stay put, appreciating the hassle-free environment you provide.
This lower turnover rate among pet owners directly translates to significant cost savings for real estate investors. You spend less on repeated marketing efforts, less time on property viewings, and reduce the gap between rental incomes. Your property stays occupied for longer periods, ensuring a consistent and more reliable income stream.
Screen Pets for a Better Pet-Friendly Experience
As we mentioned at the start of this blog, we understand that many rental owners fear the damage and risks posed by allowing animals in a home. However, a simple addition to your tenant screening process can help you find well-behaved pets (and pet owners) to improve your experience when allowing pets in rentals.
It's crucial not to overlook potential risks, primarily property damage. A property manager can tell you it's essential to exercise due diligence in screening pets as rigorously as you would human tenants. Mitigating risks upfront will help you avoid potentially troublesome pets, costly property damage, and other complications that property owners might face when allowing animals in their rentals.
To this end, consider asking prospective tenants for a comprehensive pet resume. This document should include references from previous landlords who can vouch for the pet's behavior.
Additionally, requiring veterinary records can provide assurance that the pet is healthy and up-to-date on vaccinations, minimizing health risks to neighbors and other pets. Certificates from obedience schools or other training programs can further attest to the pet's good behavior.
Enforce a Pet Addendum for Legal Protection
Safeguarding your investment should be a top priority when allowing pets into your rental property. One highly effective way to protect yourself, your property, and even your tenants is to make signing a pet addendum mandatory.
This legally binding document is an extension of the rental agreement and clarifies the rules and expectations for the pet and its owner. For instance, the addendum can specify weight limits, restricted breeds, and additional deposits or fees associated with pet ownership.
This document leaves no room for ambiguity. Both parties will clearly understand the terms under which the pet is allowed on the property, preventing future misunderstandings or disputes. This also discourages tenants from sneaking pets into the property without approval, thus helping you avoid unwelcome surprises that could lead to property damage or violations of building or community rules.
Having this addendum in place also provides a legal safety net. In case of any violations, the document can be used in legal proceedings as proof of agreed-upon terms, giving you more leverage and protection.
Plus, a well-drafted pet addendum can outline the responsibilities of pet owners, further reducing the likelihood of issues arising in the first place.
How a Norfolk Property Management Company Can Help
If you're hesitant about making your property pet-friendly, we understand.
However, the best property management company in Norfolk can help! The right property managers specialize in turning properties into pet-friendly havens that maximize ROI. They offer comprehensive tenant and pet screening, legal support for drafting pet addendums, and a wide range of other property management services to give you peace of mind.
Osprey Property Management Can Help You Enjoy Pets and Better ROIs
Offering a pet-friendly rental property provides multiple avenues for boosting your ROI. From expanding your tenant pool to reducing turnover and associated costs, the benefits are clear. By also implementing effective pet screening processes and enforcing pet addendums, you can enjoy the benefits while mitigating risks.
If you're ready to boost your returns and consider the option of allowing pets in your rental properties, trust Osprey Property Management to help you navigate the transition smoothly. Our goal is to maximize your ROI while keeping your property in excellent condition and ensuring your peace of mind.
Learn more about optimizing returns for your rental properties with our free checklist, "10 Things You Should Do To Increase the ROI for Your Rental Property."